Free To Rs 2,400: What A Covid Vaccine Will Cost You
Why are states paying more than the centre, what about taxes, and other issues surrounding vaccine pricing in India.
Bharat Biotech Ltd. has priced its homegrown coronavirus vaccine, Covaxin, at Rs 600 per dose for states and Rs 1,200 per dose for private hospitals. The vaccine, developed in collaboration with the government-funded Indian Council of Medical Research -National Institute of Virology, is priced higher than Covishield, the Indian version of the AstraZeneca vaccine, co-invented by University of Oxford and manufactured in India by the Serum Institute of India.
Purchase Price For States
- Covishield: Rs 400 per dose
- Covaxin: Rs 600 per dose
Purchase Price For Private Hospitals
- Covishield: Rs 600 per dose
- Covaxin: Rs 1,200 per dose
Each vaccine is a dual dose one.
These are the only two vaccines currently available in India, and are being procured by the central government which allocates it to states to be administered to eligible citizens via government hospitals (free) and private hospitals (up to Rs 250 per dose).
Covaxin is an inactivated and highly purified vaccine and hence its manufacture is expensive, Bharat Biotech said in a statement announcing the prices on April 24. All costs toward product development, manufacturing facilities and clinical trials were funded by the company using internal resources, as per the statement.
Considering the global vaccine prices, we are ensuring that our vaccines are affordable in comparison to any other vaccines in the world, Serum Institute said in its statement on April 21.
Both are privately held companies and the costs borne towards the vaccines is not publicly known, nor are their profit margins. But both are investing in expanding capacity to meet domestic and export requirements.
An estimated 85-90 crore Indians are eligible to be vaccinated based on the new age criteria - all those 18 years and above are now eligible.
To vaccinate them India needs 170 - 180 crore doses. 13.81 crore doses have been administered so far, according to Co-win data. Only 2.10 crore Indians have received both doses.
What Will You Have To Pay?
In short...
Healthcare, Frontline workers
- Free vaccine at government hospitals - courtesy centre. Already underway.
45+ years
- Free vaccine at government hospitals - courtesy centre. Already underway.
18 - 45 years
- Some states have said they will provide free vaccines. Most likely via government hospitals. Starting May 1.
- Other states may provide at subsidised rates. Most likely via government hospitals. Starting May 1.
- Some may pass on the full cost to citizens.
Starting May 1, anyone can pay Rs 600 for Covishield or Rs 1,200 for Covaxin at a private hospital offering vaccination. Private hospitals can also import vaccines that have been approved by Indian authorities.
But all this depends on vaccine supplies being available.
The Supply Picture
Current Serum Institute and Bharat Biotech aggregate capacity is estimated at 12 crore doses per month. Announced expansion will boost that to 20 crore in July-September quarter.
Imported vaccines from Pfizer, Moderna, J&J may also be available in the future. Their price is difficult to estimate as each has separate agreements with various countries. But reported prices range from $2 to $35.
By June, Russia’s Sputnik V will be imported by Dr. Reddy’s Laboratories Ltd. and sold at an estimated $10 or Rs 750 per dose. Russia also has agreements with other pharmaceutical companies to manufacture Sputnik in India but the timeline for that is not known yet.
Cadila Healthcare Ltd. also intends to manufacture in India once it receives regulatory approval for its vaccine ZyCoV-D.
Two Concerns
The vaccine pricing announced by Serum Institute and Bharat Biotech has raised two issues;
Differential Pricing For Centre And States
So far, the two producers have been supplying to the central government at Rs 150 per dose. Which is providing vaccines free via government hospitals and recovering Rs 150 via private hospitals. This will continue.
And though Serum Institute indicated in a media interview that even central government supplies will hereon be priced at Rs 400 per dose, a tweet by the health ministry suggests Rs 150 per dose will be maintained.
Bharat Biotech’s media statement indicates it will continue to supply vaccines to the centre at Rs 150 per dose. It also stated that it will export Covaxin at $15-20 a dose (Rs 1,125 - 1,500).
States will have to purchase vaccines from Serum Institiute at over twice the price it is charging the central government and from Bharat Biotech at four times the price the central government is paying. While the centre has undertaken to vaccinate 30 crore people, states will bear twice that burden, but spread across all of them.
What About Taxes?
It is not clear if the prices published by Serum Institute and Bharat Biotech are inclusive of GST. The statements by both vaccine manufacturers make no mention of taxes.
Yet, in a statement in Parliament, on March 9, Ashwini Kumar Choubey, minister of state in the health ministry, mentioned the centre was paying Serum Institute Rs 210 per dose including taxes.
On Apr. 24, the centre decided to waive customs duty on imported vaccines among other essentials such as oxygen tanks etc..
The Vaccine Backstory
So far all vaccination has been controlled by the central government. Only healthcare workers, frontline workers and those above 45 years of age are eligible to be vaccinated.
A policy change last week permits those 18 years and above to be vaccinated starting May 1. This responsibility will lie with state governments. Vaccine manufacturers have also been permitted to sell in the open market - where private entities such as corporates and private hospitals can purchase supplies.
Many states have said they will provide free vaccination. Many companies too have said they are keen to sponsor the vaccination of their employees and communities.
Serum Institute has requested “all corporate and private individuals to access the vaccines through the state facilitated machinery and private health systems”.
It’s statement said vaccines will be made available in retail and free trade after 4-5 months.